Annual Limit Waiver
The Patient Protection and Affordable Care Act (PPACA) restricts the use of annual dollar limits on essential health benefits. The interim final rules for this provision indicate that plans can apply for a waiver if compliance with the provision would significantly decrease access to benefits or significantly increase premiums. The U.S. Department of Health and Human Services (HHS) has issued a memo providing more details about the waiver. Here’s what you need to know.
To whom the annual limits provision applies:
The provision applies to grandfathered and non-grandfathered group plans, as well as non-grandfathered individual (or consumer) plans. It does not apply to grandfathered individual plans.
Key points from the interim final rules and HHS memo:
The interim final rules state that annual dollar limits on essential health benefits are not permitted for plan or policy years beginning on or after January 1, 2014. Until that time, annual dollar limits on essential health benefits cannot be lower than:
- $750,000 for plan years beginning September 23, 2010 to September 23, 2011
- $1.25 million for plan years beginning September 23, 2011, to September 23, 2012
- $2 million for plan years beginning September 23, 2012, to January 1, 2014
The HHS memo about the waiver program addresses these key points:
- Plans must request and receive approval for a waiver annually.
- A waiver is available only if the plan had an annual limit before September 23, 2010.
- No waivers will be granted for plan years that start on or after January 1, 2014.
- The waiver applies only to the annual plan-level limit, not the lifetime plan limit or to any benefit-specific limits.
- Depending on the group’s funding, either the group or the plan issuer can request a waiver.
- The waiver request must include:
- A plan description, including the annual limit
- Enrollment in plan
- Rates for plan
- Impact to rates/access that would result if annual limit was removed/modified to comply with the provision requirements
- Attestation that the plan and plan limit was in place before September 23, 2010, and that there would be a significant decrease in access or increase in premium without the waiver
Limited benefit plans, also known as “mini med” plans, often have annual limits well below the restricted annual limits set out in the interim final regulations.
Questions and Answers
Is there a deadline to apply for a waiver?
Yes, according to the HHS memo, the plan or issuer must apply by the following date:
- For plan years that start before November 2, 2010 – At least 10 days before the plan year starts
- For plan years that start after November 2, 2010 – At least 30 days before the plan year starts
How long will it take for HHS to process waiver requests?
HHS will process complete waiver applications within the following time frame:
- For plan years that start before November 2, 2010 – No later than five days before the plan year starts
- For plan years that start after November 2, 2010 – Within 30 days of receipt
Is there a specific form that groups need to fill out to request a waiver?
No. The HHS memo lists the information the plan or issuer needs to submit (see below), but it doesn’t specify a particular form for the request.
What information doe groups need to submit to request a waiver?
The HHS memo states that all of these items are required:
- The terms of the plan or policy form(s) for which a waiver is sought;
- The number of individuals covered by the plan or policy form(s) submitted;
- The annual limit(s) and rates applicable to the plan or policy form(s) submitted;
- A brief description of why compliance with the interim final regulations would significantly decrease access to benefits for those currently covered by such plans or policies, or significantly increase premiums paid by those covered by such plans or policies, along with any supporting documentation; and
- An attestation, signed by the plan administrator or chief executive officer of the issuer of the coverage, certifying that 1) the plan was in force before September 23, 2010; and 2) the application of restricted annual limits to such plans or policies would significantly decrease access to benefits for those currently covered by such plans or policies, or significantly increase premiums paid by those covered by such plans or policies.
What is the process for clients who want to apply for a waiver?
Clients who want to apply for a waiver should contact their sales or account management representative.
The sales or account management representative will provide these items to the client:
- Data to help the group determine the impact of increasing or removing the annual limit – for example, a rate quote with the limit removed or claims data that the group’s consultant can use for claims projections.
- The plan description and enrollment information if the client requests it.
The client will need to provide two items to the sales or account management representative:
- Documentation that it has applied for the waiver.
- Proof that the group has received the waiver (this must be received before the renewal effective date).
This process will need to take place before every plan year for which the client is applying for a waiver.
Can groups apply for a waiver for lifetime maximums?
No, the waiver only applies for annual plan-level dollar maximums.
How do groups submit their request?
Groups can send their request to HHS by mail or email.
Mailing address:
HHS Office of Consumer Information and Insurance Oversight
Attention James Mayhew, Room 737-F-04
200 Independence Ave, SW
Washington, DC 20201
E-mail address:
Use “waiver” as the subject of the e-mail
This information was provided by Anthem Blue Cross/Blue Shield. This content is provided solely for informational purposes. It is not intended as and does not constitute legal advice. The information contained herein should not be relied upon or used as a substitute for consultation with legal, accounting, tax and/or other professional advisers.
